Ethereum may not be the best blockchain to run an ICO. According to Christian, co-creator of StellarX – a trading app for Stellar’s universal marketplace, Ethereum poses many issues and Stellar is a better choice for transactional apps.
Christian and his team conducted a research project on the blockchain earlier this year, and testing was based on a third-party load test, designed by Kik. Going by the research, the network is slow and expensive.
While we finish up StellarX, we wanted to share a research project on Ethereum we did earlier in the year. We ran our own at-scale load tests, and got scary results. https://t.co/oNPKuZ2b24 pic.twitter.com/J0s32ioSHs
— StellarX (@stellarxhq) August 14, 2018
“It’s not Ethereum’s fault that developers are asking from the tech what it was never meant to deliver,” he said, adding that the blockchain’s problems started with “misguided entrepreneurs”.
Ethereum blockchain’s speed and cost issues
The blockchain queues transactions on a per-account basis. But miners on the network do not prioritize transactions by wait time.
The more active an account is, the longer the transaction queue and the network lacks the mechanism to clear it. So high-volume accounts face increasing transaction lag.
Miners in the blockchain usually have their own conditions for the transactions they accept. Many only accept high-gas price transactions while some only accept their own transactions. Christian pointed out that because of this, miners will voluntarily let block space go idle.
Moreover, per-user costs for an app running on the blockchain goes up quickly as it adds users. This is the main reason behind gas prices spiking when the network gets congested.
Stellar better choice for firms planning to issue tokens
According to Christian, the Etherem blockchain is a good choice for building a distributed computer program, with no centralized decision-making apparatus.
But most blockchain companies want to issue digital assets and process transactions, which he says is “exactly where Ethereum will let you down”.
“If you want to build a decentralized Uber and Lyft on top of an unscalable Ethereum, you are screwed. Full stop,” said Ethereum co-founder Vitalik Buterin in a recent Deconomy panel discussion.
“…if you plan to issue a digital asset and you plan to transact at high volumes as a core part of your strategy, pick a platform that is optimized for that. Do what we did, and build on Stellar,” Christian concluded.
Image via Shutterstock
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